“Learn to flip or be ready to flip burgers.” A fellow degenerate told me this phrase, and it stuck with me.

In the age of information, it is easy to form an opinion about something and difficult to change it. Worse yet, often, we judge before we even have the information to make a well-formed opinion or “prejudgement.”

Lil B pointed out the dangers of prejudgement in his song, “The Age of Information.”

“The information like art, it hurt the race
Because we judge before we classify
It’s like a cage….”

Reluctance to grasp new concepts cripples your ability to anticipate the market. Why are people buying random jumbles of text for thousands of dollars? Are they stupid?

Actually, yeah, they probably are stupid. But to arrive at that conclusion without pre-judgment is difficult, especially because it feels so obvious. After all, some people are likely smarter than you arguing that these things do have value.

My most productive conversations in this industry happen when I approach my companions as having a “smol brain,” a term I first encountered on crypto Twitter.

I get a chance to learn if I assume that they are smarter than me, even if my inner voice screams otherwise. Understanding concepts that are alien to you is extremely hard.

I still make a lot of mistakes by not following people who share good knowledge. Many times that’s because I fall into my old prejudgement patterns and dismiss their opinions.

We are at the stage of exuberance in the market, but if you don’t quickly learn where the money flows, you are missing out. Even if eventually you will be right, at the moment, you’re still wrong.

“Do you want to be right, or do you want to make money?” That’s another great question that my former colleague, Jay Putera, asked me. I answered it a few months ago, did you?

None of this suggests that Loot and Adventure Gold have any value. It’s more about adapting to the market rather than clinging to a thesis⁠ that could be wrong.

SIMETRI Portfolio – Liability-Driven Investing

We’ve been talking a lot about the importance of liabilities, so the final section about portfolio construction in the Digest will connect liabilities and performance.

Have you ever skied? I haven’t, but the following analogy will still make sense, I promise.

There are many different snow conditions, from soft and powdery to sharp and icy. It’s not just about the weather, either. For example, public tracks have stiff snow because people trudge through them frequently, whereas forests have soft snow because it’s seldom disturbed.

You don’t want to use the same type of skis for tracks and forests under different snow conditions. For tracks, you want narrow skis to move quickly, while in forests, you want wide ones to prevent you from sinking into the snow.

The same is true for investments. You don’t want to use a portfolio optimized for hedging your liabilities as the same portfolio you want to earn profits with. That’s like skiing in the forest with the narrowest possible skis⁠—you’re asking to get sunk.

In finance, there are terms for portfolios with different focuses: performance seeking and liability hedging. The former focuses on greed, while the latter focuses on fear.

A portfolio composed only of SIMETRI Picks would be performance seeking. However, as we learned, volatility and risk are also important.

Portfolio construction theory tells us that we should strive to find the most return per unit of risk. Thus, adding other assets like individual stocks or indices to such a portfolio can make sense even if their returns are lower than those in crypto.

A portfolio composed of fixed income instruments (like Element finance principal and yield-bearing tokens) would be liability hedging. Its purpose is to attempt to guarantee enough cash flow to help you reach your financial goals in the future.

Now you have the basics of portfolio construction in your hands. It was a lot to unpack and digest, so don’t worry if you already forgot something. The key is in understanding your financial situation and adjusting your portfolio accordingly. Unfortunately, since I’m a crypto geek rather than a financial advisor, I can’t get any more specific than that.

You can always go back to previous Digests to brush up on some concepts. The more you implement them in your money management routines, the less your investment will resemble gambling. I know it’s difficult to do in crypto, but give it a try, and it will have a tremendous impact on your mental and financial well-being.

Now, let’s look at the Portfolio’s performance.

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